Why Joe Rogan is indeed worth $200m to Spotify

Why Joe Rogan is indeed worth $200m to Spotify

Spotify’s deal with Joe Rogan for exclusive hosting rights to his podcast was reported last week to be double previously thought.

Two Spotify sources told The New York Times Spotify’s deal for The Joe Rogan Experience in May 2020 was worth $200m, when it was previously reported, but never confirmed, to be half that amount.

The Joe Rogan Experience just released episode 1780, having been broadcast since 2009, with multiple episodes dropping each week which can run between 90 minutes and over four hours long.

It was the most listened-to podcast in the US last year with a reported average of 11 million listeners per episode.

It has recently come more into the spotlight as artists like Neil Young, Joni Mitchell and India Arie have withdrawn their music from the streaming platform in protest at the podcast’s alleged Covid misinformation and use of racist language.

Spotify has since removed 70 archived episodes of the podcast, and put Covid-19 advisories on certain episodes, but is The Joe Rogan Experience still worth the money for the music streaming giant?

Joseph Evans, head of tech at Enders Analysis, told Mediatel News Spotify has “good strategic reasons” to increase podcast listening on its service.

He said: “Rogan is the biggest podcast in the US, maybe the world. His ad-reads are reportedly very effective, even among podcast ads- his audience listens to him. Obviously you have to set that against controversy, bad press, and artists leaving in protest. Is Rogan worth $200 million? Maybe not in isolation. But podcasts are a strategically important category for Spotify, and the deal gives them exclusive rights to the biggest show going.”

“More non-music listening will improve its negotiating position with the major record labels, a small group of companies with must-carry content for any music streamer. Podcasts also let Spotify serve ads to its paying subscribers, a valuable target. And the more listening behaviours it can collect together on its app, the stickier and harder to leave the service becomes, pushing down churn,” he added.

Evans said more advertisers than ever before are interested in trying podcast advertising, making the market “really hot” at the moment.

He added: “Real estate, in the form of podcast networks, tech providers and individual shows, is being snapped up by big players like Amazon, Spotify and iHeart. It’s been an exciting area for a while, but the money’s really starting to flow.”

Spotify recently acquired Chartable and Podsights to add to its measurement and analytics capabilities.

Bryan Barletta, founder of Sounds Profitable told Mediatel News there is “a substantial gap” between The Joe Rogan Experience and the next biggest show, which justifies the price.

He said: “If JRE [The Joe Rogan Experience] lost half of his pre-Spotify audience and released just one episode per week, even if Spotify could only fill 50% of available ad slots at industry average rates of $25 CPM, they would still make a 2-2.5x gross profit.

“But JRE sells out easily and commands at 2-4x that CPM.”

Barletta added that the podcast leading to an uptick in paying Spotify subscribers, taking market share away from Apple Podcasts and YouTube and advertisers needing to buy a bundle of shows to gain access to The Joe Rogan Experience are “just a bonus”.

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